TY - JOUR
AU - Bernheim,B. Douglas
AU - Severinov,Sergei
TI - Bequests as Signals: An Explanation for the Equal Division Puzzle
JF - National Bureau of Economic Research Working Paper Series
VL - No. 7791
PY - 2000
Y2 - July 2000
DO - 10.3386/w7791
UR - http://www.nber.org/papers/w7791
L1 - http://www.nber.org/papers/w7791.pdf
N1 - Author contact info:
B. Douglas Bernheim
Department of Economics
Stanford University
Stanford, CA 94305-6072
Tel: 650/725-8732
Fax: 650/725-5702
E-Mail: bernheim@stanford.edu
Sergei Severinov
997-1873 East Mall
Vancouver, British Columbia
V6T1Z1
E-Mail: sseverinov@gmail.com
AB - In the United States, more than two-thirds of decedents with multichild families divide their estates exactly equally among their children. In contrast, intra vivos gifts are usually unequal. These findings challenge the validity of existing theories regarding the determination of intergenerational transfers. In this paper, we develop a theory that accounts for this puzzle, based on the notion that the division of bequests provides a signal about a parent's altruistic preferences. The theory can also explain the norm of unigeniture, which prevails in other societies.
ER -